Ready for these California business law changes in 2017?
California Chamber of Commerce’s legal team, and other law firms identified 40 key employment-related laws enacted by the state of California that may affect day-to-day business operations in 2017 and beyond.
While most of this new legislation is well-defined, some bills can leave room for interpretation.
Among the most challenging issues for 2017 are raised by passage last month of Proposition 64, legalizing the adult recreational use of marijuana in California. This state law, which varies from Federal law and became effective Nov. 9, enables employers to keep, enact and enforce workplace policies regarding marijuana. Some new laws make small changes to parts of existing law, or may relate only to specific industries. This year many bills feature delayed or phased-in implementation. Even though a bill may have passed, changes can occur at any time.
Here are some recent examples:
U.S. District Court Judge Mazzant recently blocked the new federal overtime rule that was to take effect Dec. 1 (see WAGE AND HOUR LAW section below).
The IRS is extending the employer deadline for certain Affordable Care Act forms to be provided to employees. The Form 1095-B (Health Coverage) and Form 1095-C (Employer-Provided Health Insurance Offer and Coverage to employees) deadline is now March 2, 2017 — extended from Jan. 31, 2017. However, the deadline for employers to file the 2016 Form 1094-B and Form 1095-B with the IRS was not extended and must be filed by mail Feb. 28, 2017, or by March 31, 2017, if filing electronically (required for employers who have submitted 250 or more forms), according to Gail Cecchettini Whaley, CalChamber Law Counsel/Content.
The IRS is also reminding employers of the new Jan. 31 (not Feb. 28) filing deadline for Forms W-2 which also applies to certain Forms 1099-MISC reporting non-employee compensation payments to independent contractors, and changes in rules regarding extensions to file Form W-2.
The U.S. Immigration Agency has published a new Form I-9 (Employment Eligibility Verification) that must be used by Jan. 22, 2017.
Unless otherwise stated, all new legislation goes into effect on Jan. 1, 2017. Here are some noteworthy new laws from the California Legislature:
WAGE AND HOUR LAW
Several new California laws will affect employers’ wage-and-hour obligations in 2017. In addition to California laws, a new federal overtime rule was scheduled to go into effect on Dec. 1, 2016. However, a U.S. District Court judge issued a nationwide injunction against the Department of Labor (DOL) on Nov. 22 blocking its final overtime rule, which would have more than doubled the Fair Labor Standards Act (FLSA) salary test for executive, administrative and professional employees – meaning white-collar employees earning below the new $913 weekly threshold would have been entitled to overtime.
Looking at the language of the FLSA, the court found that statutory “white-collar exemptions” apply to employees performing actual executive, administrative and professional duties. Thus, Congress intended the exemption to depend on an employee’s duties rather than their salary. The court held that the DOL exceeded its delegated authority and “ignored Congress’s intent by raising the minimum salary level such that it supplants the duties test,” according to Partner Jeffrey D. Polsky and Associate Melissa Shinto with Fox Rothschild LLP.
SB 3 increases the minimum wage over the next several years to $15 an hour. On Jan. 1, 2017, businesses with 26 or more employees must pay a minimum wage of $10.50 per hour. Small businesses with 25 or fewer employees are not required to begin to implement this increase until 2018. The legislation allows for future minimum wage increases based on the Consumer Price Index.